U.S. Income Tax Return of a Foreign Corporation
Tax form 1120-F is to be used by foreign corporations that have income that is “effectively connected” with a U.S. trade or business. Generally, that means any foreign corporation that has an employee, office, warehouse or production facility in the U.S. The foreign corporation would file IRS form 1120-F to report their income, gains, losses, deductions, credits, and to figure their U.S. income tax liability similar to how a domestic corporation would report these on their tax return. Note that the rules regarding income being “effectively connected” to a U.S. trade or business are not clear cut, so it is possible that a foreign corporation may not meet the requirements for filing tax form 1120-F even if they appear to do so.